Volkswagen: Diesel Gate

Group 4Anna PhilipS. AnupriyaDeeksha SAditya VenchamalaAgin P Jose

Profile• Founded- 1937• Country –Germany• Head Quarters- Wolfsburg• Every day, sells 592,586 employees worldwide produce

nearly 41,000 vehicle, sells in 153 countries. • Recently surpassed Toyota as the world’s biggest automaker

measured by the number of cars sold.

US market• Entered US market in 1955• Initially headquartered in New Jersey . Currently in Virginia.• Currently sells around 400,000 cars•Market share in US

Current state in US• Halt sales of Diesel cars in US• Recall of cars with 4- cylinder turbo diesel engine from 2009-

2015.• EPA ordered to recall half a million vehicles and pay 18

billion dollar fine.

EPA’s Fuel Economy Regulations-• Light-Duty Vehicle Emissions Standards and Corporate Average Fuel

Economy Standards

Corporate Average Fuel Economy(CAFE)

MPG: Label Values vs. CAFE

• The Gas Guzzler Tax

Impact of NOx Emitted by VW’s Vehicles

• 11m cars are affected globally, VW's defective vehicles could be responsible for between 237,161 and948,691 tonnes of NOx emissions each year• 250,000 to 1m extra tonnes every year.• The damage from these VW vehicles could equate to all of the UK’s

NOx emissions from all power stations, vehicles, industry and agriculture.

Source: The Guardian

NOx’s Impact on health• Short-term NO2 exposures, ranging from 30 minutes to 24 hours, with adverse

respiratory effects including airway inflammation in healthy people • Increased respiratory symptoms and issues in people with asthma.• NOx react with ammonia, moisture, and other compounds to form small

particles. It can cause or worsen respiratory disease, such as emphysema and bronchitis, and can aggravate existing heart disease.• Concentrations of NO2 have been measured to be approximately 30 to 100%

higher than concentrations away from roadways.• Approximately 16% of U.S housing units are located within 300 ft of a major

highway, railroad, or airport (approximately 48 million people).Source: EPA website

What is the Diesel gate scam?• The scandal started on 18th September 2015 when the Volkswagen violated the

clean air act and was issued a notice of violation by the EPA.• The company programmed their model year 2009-2015 TDI engines so that US

standards nitrogen oxides emissions were met only during emission testing .• Emission tests while driving were up to 40 times higher.• The programme was named the defeat device, which is prohibited by the clean

air act.• Approximately 11million cars world wide and 500000 in the US included such

programs.Source:BBC.com

How did it all start?• In 2005 part of VW wanted to purchase the Mercedes’ Blue tech system for

reducing emissions, but other parts of VW rejected this proposal.• They decided to make their own system in association with Bosch.• They started migrating their engines from TDI to common-rail fuel injection.• This system allows for higher-precision fuel delivery using electronically

controlled fuel injectors and higher injection pressure, theoretically leading to better fuel atomization, better air/fuel ratio control, and by extension, better control of emissions.• This system failed to deliver and VW chose to fix the cars with a defeat device

which when tested would switch the car to produce less emissions Source:BBC

How The VW Programmed Cars to behave on testing Steps

1. Speedometer, steering wheel sensors and air pressure sensors send data to central computer.

2. Computer recognises that it is under test conditions and switches on a ‘dyno calibration’, which alters the working of the engine to minimise emissions.

3. If road, rather than rolling road, conditions are detected the computer uses a ‘road calibration’, which bypasses the emissions reduction mechanisms to favour engine performance and efficiency

4. The EPA says it was the NOx filter whose behaviour was changing in the different calibrations

Source: The Guardian

Direct effects of the scam on VW • 500000 cars are planned to be called back in USA with a budget allocated amounting to

$6.5bn.• EPA has the power to fine a company up to $37,500 for each vehicle that breaches

standards - a maximum fine of about $18bn.• Total 11 million cars sold during this period around the Globe.

Source :BBC• About 4% of their new stock is affected in UK

Sorce : Dailymail• Estimated damage to its sales and reputation may cost Euro 35 billion

Source : Business-standard$4.2 bn bonds maturing in Nov which are converted to share but facing huge pressure from investor side also.

Source : Business-standard

Timeline

2007: Suspected software first installed

2014:Researchers search vehicle

July 2015:Environmental

questions September 18:

Authorities go public Stock sinks

Source : BBC

"The revelations are likely to lead to a sharp fall in demand

for diesel engine cars," said Richard Gane, automotive

expert at consultants Vendigital.

"Diesel cars in Europe operate with worse technology on

average than the US, Our latest report demonstrated that

almost 90% of diesel vehicles didn't meet emission limits

when they drive on the road. We are talking millions of

vehicles." said Jos Dings, from the pressure group Transport &

Environment.

"The industry acknowledges that the current test method is

outdated and is seeking agreement from the European

Commission for a new emissions test that embraces new testing

technologies and is more representative of on-road

conditions.“ SMMT.

"My most urgent task is to win back trust for the Volkswagen Group - by

leaving no stone unturned," Mr Mueller

"We've totally screwed up," said VW America

boss Michael Horn

"We've totally screwed up," said VW America boss

Michael Horn